Reader Ray contributed a marvelous reality check in the Comments section overnight:
“You remind me of Trevor Lawrence the #1 NFL draft pick this year. He said he was putting his entire $21,000,000 signing bonus into Bitcoin. Dumbass! BTC was at $55,000 and today it is trading a little over $40,000. That is down 27% in a matter of 2 weeks, or his $21,000,000 signing bonus is now worth $15,333,000. Worldwide Bitcoin 24 hour volume today a whopping $103 Billion. Biden spent $6 Trillion in his first 100 days. Kind of puts things in perspective.”
It might be important to consider that crowd behaviors haven’t changed much since Charles Mackay wrote “Extraordinary Popular Delusions” in 1841. Although he was privy to the blow-up of both Tulip Mania (1634–) and the South Sea Company bubble (1720), it’s not much different than the “lumber bubble” or the Bitcoin collapse we’re experiencing now.
People – as another poster out in Midland notes – oscillate between greed overcoming fear and then back to fear overcoming greed. (FOG)
Bitcoin today is back over $40,000. A country-mile, though, from the $64,400 level a couple of weeks back.
And the stock market? Last Friday our Aggregate Index closed the week at 36942.47 while the close yesterday was 36951.08. $10 bucks. Whee!
The astute investor will look at Bitcoin and the stock market in similar ways.
Having your personal wealth tied up in either commits you to “continuation bias” in your thinking. Because both totally depend on operation of the Grid and the Internet for function.
Stocks are virtually all held in “trust” by the Depository Trust and Clearing Corporation (DTCC). Which while totally reliable (so far…) does not absolutely guarantee they will be about for the Second Coming.
Thus, there is risk in ALL investments. Which may be analyzed as systemic risk (DTCC may have systemic risk similar to Coinbase, for example). However where they diverge is over “underlying asset risk.” Made-up numbers have a shorter track record (*with some large losses; lost hard drives and such) versus fractional ownership claims on corporations.
Managing Risk in Life
You’ll see in a rare moment of quiet contemplation that Life is nothing BUT sequential risks. Starts with the risk of standing up in the crib. Moves on to falling off your first bicycle. Then getting dumped in a relationship. Risk of divorce. Risks of raising children. And now? The risks of getting “old.”
In the end all risks are realized. As the risk of “dead” is 100%. (*Which is what my next book, “Packing for Death” is all about.)
The realities to deal with this morning?
- On an aggregate basis stocks are up less than $10 bucks this week.
- Bitcoin’s in about the same condition after last weekend’s bloodletting.
- Temporary peace in the Middle East isn’t real – yet. Despite claims such as Palestinians see victory in Gaza truce as Israel warns Hamas – as reported by ABC News (go.com)
- All the while, the risk of Joe Biden completing his term seem relatively unchanged. Despite doing a very Trump-like credit grab: Biden tries to claim credit for cease-fire between Israel and Hamas.
Investing them becomes as much “risk management” as proactively seizing the initiative in Life.
Don’t get me wrong: We all make what seem like “big decisions.” The reality my studies point to, though, is that we make “bounded decisions.” Which all lead inevitably to the intractable “dead” end. Regardless of momentary genius along the way.
Hell of a video game design, this simulation presents is it not?
Still, hope springs Eternal. We each try to “out-fox” the other 7.6 billion players in this world. Long odds at best. Today’s “news flow” is 99.9% useless hog slop.
For a lower slop-ratio, one’s better off reading nonfiction books during time when “news” is being pandered. Media forces a game out of “chunk-spotting” among bowls of slop. Mass attention to Minutia. The “woke” joke.
A Writer’s Quandary
Not a morning goes by we don’t ask “What’s really going to be useful today?” Like sending a child off to school with the right change for “milk money.”
For economic opportunity our pick list this time includes:
- “Crypto and stocko” risk comprehension.
- Lumber – up 4.75% – looks to be in a wave 2 bounce. Kinda like BTC.
- Inflation outlooks are stable as gold and silver haven’t budged much.
- And the 10-year Treasury note closed 1.634% Thursday. When it pops over 1.75% it’ll be time again to hide with the dust bunnies.
Slop spotting today is more entertaining although largely WGAF material:
- Prince Harry, Prince William condemn BBC for 1995 Princess Diana interview
- Cuomo: NY offers $5M lottery scratchoff tickets for those getting vaccinated
- And the “keep-alive” for the TDS ad and book monetizations never ends, does it? “That F*cking Lunatic”: New Book Reveals Obama’s ‘Candid’ Thoughts About President Trump.
Still, There IS Useful Information
- Beware the Rise of Scamerica from the American Institute for Econo9mic Research.
- For contrarians (who bet against the NY Times worldview): Covid on the Run – The New York Times. Beware false rumors of victory, we’re thinking…
And it’s also useful to look at Big Data Analytics to see “what’s hot” in the daily media echo chamber:
The biggest of the news search engines was rolling this way:
While the other “Bing one” in news indexing was mostly around “cease fire” terms. No need to pick your mindset – it’s being picked for you. Thanks Big Search Engines.
Keep an Eye On:
Quietly – one of our “sources in a position to know” expects something BIG will be along within the next month to six weeks. “You’ll know it when it happens, if it does,” he informed me.
We have detected what might be considered “Disclosure Wave building.”
Have you noticed the increasing number – and quality – plus breadth of outlets – running UFO content lately?
- Defense Department confirms leaked Navy UFO video (hawaiinewsnow.com)
- UFO news: Bombshell UFO report from US tipped to be ‘story of the century’ | Weird | News | Express.co.uk
- Pentagon Admits to Regular Everyday UFO Encounters | NextBigFuture.com
- From UFO to UAP: how flying saucers became legitimate (msn.com)
Sizing up “risk” from UFO/UAP phenomena is difficult. Elaine and I, have cobbled-up an approach based on medical tenets: “First, don’t be lunch.”
A “War of the Worlds” fear has been deeply inculcated. Another reason to live apart from easily targeted stewpots of humans (big cities).
It’s also worth remembering how the famous Twilight Zone episode “To Serve Man” ended:
Not suggesting this is the focus of our source’s concerns.
But, “Feedlot Earth” does seem to be getting kind of full, here lately.
Maybe I’ll skip breakfast. Might lower my personal risk profile a bit.
Sell your distillery stocks and short cheesecake. If you’re an alien shopper, I’d go well with a béarnaise sauce.
Write when you get rich,